Market anticipating higher volatility and lower stock prices after Fed-induced slide

From Nasdaq: 2024-12-23 08:31:55

The focus in the coming week will be Wednesday’s monetary decision by the Federal Open Market Committee (FOMC). Option buyers on CBOE Market Volatility Index (VIX-13.81) futures are anticipating or hedging against higher volatility and lower stock prices. The decline in the VIX to near its 2024 lows has attracted call buyers, foreshadowing higher volatility. Fed Chairman Jerome Powell’s comments on rates and inflation led to a 4% weekly decline in stocks. The SPX is below short-term levels of support and potential resistance is in the 6,000-6,010 area. The VIX peak last week indicates that bulls remain in control if it stays below a certain level. Short covering may keep pullbacks in check as the equity market remains highly shorted.



Read more at Nasdaq: Short-Term Levels to Watch After Fed-Induced Slide